This section is based on information contributed by Geoscience Australia, the Department of Industry, Tourism and Resources and the Australian Bureau of Agricultural and Resource Economics (ABARE) (August 2004).

Note: The Australian EDR information is for December 2003 and therefore may differ from the information in table 16.11. Values are given in Australian currency unless otherwise stated.

Bauxite is a heterogeneous naturally occurring material from which alumina and aluminium are produced. The principal minerals in bauxite are gibbsite, boehmite and diaspore (which has the same composition as boehmite but is denser and harder). Bauxite is the ore from which alumina (aluminium oxide) is extracted while aluminium is produced from smelting alumina.

Australia’s aluminium industry is a large integrated industry of mining, refining and smelting, which is of major economic importance nationally and globally. Its EDR of bauxite (4.8 Gt) provide a world class resource base for the industry, which comprises five bauxite mines, six refineries, six primary aluminium smelters, twelve extrusion and four rolled product (sheet, plate and foil) mills. The industry ranks among the world’s lowest cost producers of bauxite, alumina and aluminium and is the largest producer of bauxite and the largest producer and exporter of alumina.

Over 16,000 people are employed directly by the industry in all states and the Northern Territory.

In 2003 production totalled 55.6 Mt of bauxite, 16.5 Mt of alumina and 1.9 Mt of aluminium (ingot metal). Compared with 2002 these represented increases of 2.7%, 0.9% and 1.1% respectively. Australian bauxite exports of $180m in 2003 were 5% higher than in 2002. Alumina exports rose by 0.7 Mt (5.2%) in 2003 but aluminium exports fell slightly.

Despite the significant increase in alumina exports the value of shipments fell by $90m (2.4%). The value of aluminium exports also decreased by $419m (almost 11%) due mainly to a stronger Australian dollar. In total, bauxite, alumina and aluminium exports in 2003 were worth $7,267m, or 7% of total Australian merchandise export earnings. This placed the aluminium industry behind petroleum and coal as the third-largest export industry.

Development of, and production in, the aluminium industry continued strongly in 2003. Expansion of the Weipa bauxite mine in Queensland is under way and is expected to increase production capacity to 16.5 Mt per year.

Coal

Black coal is a solid rock formed from brown coal after greater heat and pressure have been applied. Black coals are distinguished by rank and may be sub-bituminous, bituminous or anthracite. Black coal is primarily used for electricity generation and the production of coke, which is integral to the production of iron and steel. Black coal is also used as a source of heat in the manufacture of cement and food processing. Brown coal is a less matured form of coal. It has a high 'in situ' moisture content (up to 60%) and a high oxygen content, with a correspondingly low heating value. It is highly susceptible to spontaneous combustion. Brown coal is used widely for power generation, is made into briquettes, and can be converted to liquid or gaseous fuels.

Although coal mining occurred in all states in 2003, New South Wales and Queensland produced over 96% of all black coal (anthracite, bituminous and sub-bituminous coals) and Victoria produced all the brown coal (lignite). Australia’s EDR of black coal is 39.5 Gt, which is about 5% of total world EDR making Australia’s holdings the sixth largest in the world. EDR of brown coal is 37.5 Gt, which gives Australia the second largest holding in the world and accounts for 20% of world EDR.

Australia's coal production and exports have risen strongly over the past two decades. Production of black coal increased in 2003. Output of saleable black coal at 280.7 Mt was 2.7% higher than in 2002 and was 7% of world output, making Australia the world’s fourth largest producer. Brown coal production reached 67 Mt in 2003, 8% of total world output. Australia was the world’s third largest producer of brown coal.

Black coal was Australia’s leading mineral export in 2003 generating revenue of $10.9b - 10% of Australia’s total merchandise export revenue. However, this was a fall of 15.5% compared with 2002, despite an increase in tonnage shipped of 14.7 Mt (5.5%), owing to the combined impact of lower prices and the appreciating Australian dollar.

Copper

Copper occurs in various forms. It can occur naturally in its pure state (native copper) but is principally mined as chalcopyrite. Copper is one of the most important and widely used metals of modern society due to its properties of:

high electrical and heat conductivity

ductile and malleable

resistant to corrosion

ability to form alloys with other metals

These properties enable copper to be used in a wide range of applications. The largest use of copper is in the electrical industry where copper wire and cable account for about half of the world’s copper production. Other major markets are the motor vehicle and construction sectors. Copper is also an integral part of the expanding information technology sector and is used in the manufacture of computers, mobile phones, fax machines and televisions.

Major Australian copper mining and smelting operations are at Olympic Dam (South Australia) and Mt Isa (Queensland), with smaller projects in New South Wales, Queensland, Western Australia and Tasmania. Australia’s EDR of copper is 32.8 Mt giving it the world’s third largest holding of copper EDR with 7% of the total.

Mine production of copper in 2003 was 2.5 Mt of copper ores and concentrates which contained 869,000 tonnes of copper. These were 2.6% and 1.6% lower than in 2002. Apart from Olympic Dam and Mt Isa, other significant copper operations are at Northparkes and Cadia-Ridgeway (New South Wales), Golden Grove (Western Australia), Ernest Henry, Osborne and Mt Gordon (Queensland) and Mt Lyell (Tasmania). As a producer, Australia ranks fourth, with 10% of world output, after Chile, the United States of America and Indonesia.

Australia's exports of copper concentrates and refined copper were valued at $2.02b in 2003, 1.9% of the value of total merchandise exports.

Diamond

Diamonds are composed of carbon, and are the hardest known substances. They occur naturally but are extremely rare compared with other minerals. Diamonds are formed deep in the earth and are carried to the surface or near surface by volcanic rocks in narrow cylinder-like bodies called 'pipes'. A large proportion of industrial diamonds are manufactured, and it is also possible to produce synthetic diamonds of gem quality. Uses for diamonds include jewellery, computer chip manufacture, drill bit facing, and stone cutting and polishing.

Australia produced 31.03 Mct of diamond in 2003, making it the world's largest producer of diamond by weight. It is the largest producer of industrial-grade diamond and the second largest producer of gem/near gem diamond. Botswana, a close second in terms of diamond production by weight, is the leading diamond producer by value, with Australia ranked eighth.

Australia's EDR of gem/near gem diamonds is 67.4 Mct and industrial diamonds 70.0 Mct. Australia's EDR of industrial diamond is ranked third in the world, with 16% of world EDR.

The majority of Australian production was from the Argyle mine in the Kimberley region of Western Australia which produced 30.91 Mct of mostly industrial and cheap gem quality diamonds. Argyle production was down nearly 8% on 2002 and reflected the mining of lower grade material in the Northern Bowl and the cessation of mining of alluvial diamonds in late 2002. A total of 9.787 Mt of ore was mined from the Argyle AK1 pipe giving an average grade of 3.16 ct per tonne, comparable with 2002 figures (3.19 ct per tonne).

Gold

Gold has a range of uses but the two principal applications are as an investment instrument and in the manufacture of jewellery. Secondary uses, in terms of the amount of gold consumed, are in electronic and dental applications.

Gold resources occur and are mined in all Australian states and the Northern Territory. Australia’s EDR of gold is 5,415 tonnes, the third largest in the world after South Africa and the United States of America.

Australian gold production reported by ABARE for 2003 was 284 tonnes, similar to output from the United States of America. This level of production makes Australia and the United States the second largest producers in the world after South Africa, with about 11% of world output. The Super Pit at Kalgoorlie in Western Australia was the largest producer with an output of nearly 0.9 million ounces.

Iron ore

Iron ore is the source of primary iron for the world's steel industries. Over 97% of iron ore production occurs in the Hamersley Basin of Western Australia. Small production also comes from elsewhere in Western Australia, Tasmania and South Australia. Australia’s EDR of iron ore is 12.4 Gt which is about 9% of world EDR. Australia has the fourth largest iron ore holding in the world.

Production of iron ore was strong, totalling 212 Mt in 2003, which was 18% of world output, making Australia the world’s third largest producer. Australia also produces iron and steel and in 2003 output totalled 9.7 Mt.

Iron ore was a major contributor to Australia’s export income in 2003 with 87.3 Mt valued at $5.1b exported. In addition, Australia exported 3.8 Mt of iron and steel, which generated revenue of $1.8b. The combined iron ore and iron and steel exports accounted for 6.3% of Australia’s total merchandise export revenue.

Manganese ore

Manganese ore was mined in the Northern Territory and Western Australia in 2003. Production reached 2.55 Mt, 12% of world output, making Australia the third largest producer in the world. Australian production is from two mines - Groote Eylandt in the Northern Territory and Woodie Woodie in Western Australia. Australia’s EDR of manganese ore, at 124 Mt, is 13% of world EDR and Australia has the third largest EDR in the world.

In 2003 Australian exports of manganese ore totalled 2.14 Mt valued at $312m.

Mineral sands

The three main minerals mined from Australian mineral sands deposits are the titanium-bearing minerals rutile and ilmenite and the zirconium-bearing mineral zircon. Rutile and ilmenite are used mainly in the production of titanium dioxide pigment. A small portion, less than 4% of total titanium mineral production and typically rutile, is used in making titanium sponge metal. Zircon is an opacifier for glazes on ceramic tiles, and is used in refractories and the foundry industry.Production in 2003 was from Western Australia, Queensland and Victoria.

Australia’s EDR of ilmenite is 198.2 Mt of which 63% is in Western Australia, 26% in Queensland and the rest in New South Wales and Victoria. Australia accounts for about 32% (the largest holding) of the world’s EDR of ilmenite. Queensland and Western Australia together hold over 70% of Australia’s 23.5 Mt EDR of rutile, which, at 47% of world EDR, is the world’s largest.

EDR of zirconis 29.5 Mt, with Western Australia and Queensland holding just over 80%. In world terms, Australia’s EDR is 41% of the total and is the largest holding by any country.

Although Australia has substantial EDR of mineral sands, Geoscience Australia estimates that some 18% of ilmenite, 24% of rutile and 28% of zircon EDR is unavailable for mining. They are in areas quarantined from mining that are largely incorporated into national parks. Deposits in this category include Moreton Island, Bribie Island and Fraser Island, Cooloola sand mass, Byfield sand mass and Shoalwater Bay area, all in Queensland, and Yuraygir, Bundjalung, Hat Head and Myall Lakes National Parks in New South Wales.

In 2003 Australia produced 2.01 Mt of ilmenite, 173,000 tonnes of rutile, 58,000 tonnes of leucoxene and 462,000 tonnes of zircon. Almost all Australia’s rutile and zircon production is exported, but over half the ilmenite production is upgraded to synthetic rutile. Australia was the world’s leading producer of ilmenite (28% of world output), rutile (53%) and zircon (46%) in 2003.

Nickel

Australia's total resources of nickel are 42 Mt of which EDR is 22.8 Mt. Western Australia has the largest nickel resources, with 90% of total Australian EDR. Australia holds the largest share of the world’s EDR, with 36%.

Australian mine production of nickel in 2003 increased by 2.8% to 188,000 tonnes, all from Western Australia. Production of intermediate nickel products (matte and speiss) totalled 107,000 tonnes in 2003 and refined nickel was 130,000 tonnes. The value of all nickel products exported was $2.7b. Australia was the world’s second largest producer, accounting for 15.6% of estimated world nickel output.

Tantalum

Australia is the world’s largest producer of tantalum in the form of tantalum concentrates. Australia also has the world’s largest stock of tantalum resources, principally in its deposits at Greenbushes and Wodgina in Western Australia.

Australia has the world’s largest EDR of tantalum at 41,000 tonnes, all of which is accessible for mining. This is approximately 93% of world EDR.

Australian production of tantalum, in the form of tantalum pentoxide was about 2.2 Mlb in 2003, 15% lower than in 2002.

Uranium

Australia has 689,000 tonnes of uranium in Reasonably Assured Resources recoverable at costs of less than US$40/kg U - this is the world’s largest resource and represents 40% of world resources in this category (OECD Nuclear Energy Agency & International Atomic Energy Agency, 2004: ‘Uranium 2003 Resources, Production & Demand’). Approximately 97% of Australia’s total resources are in six deposits:

Olympic Dam in South Australia, which is the world’s largest uranium deposit

Ranger, Jabiluka and Koongarra in the Alligator Rivers region in Northern Territory

Kintyre and Yeelirrie in Western Australia.

Three uranium mines operated in 2003 - Ranger open pit, Olympic Dam underground mine, and the Beverley (South Australia) in situ leach operations. In 2003 Ranger produced 5,065 tonnesof uranium oxide, Olympic Dam 3,176 tonnes and Beverley 689 tonnes for a total of 8,931 tonnes, 10% higher than for 2002. Australia, with approximately 21% of world uranium production in 2003, is the world’s second largest producer after Canada (29%).

Exports of uranium oxide in 2003 were 9,612 tonnes, valued at $398m. Australia has no significant national demand for uranium and all production is exported under very stringent conditions to ensure it is used only for peaceful purposes. These conditions, referred to as ‘nuclear safeguards’, require customer countries to allow inspectors from the International Atomic Energy Agency to verify that the uranium is not directed into weapons programs. In addition, Australia requires compliance with parallel conditions under treaties it has concluded with end-customer countries.

Zinc, lead, silver

Zinc is the 23rd most abundant element in the earth's crust. The construction, appliance and vehiclemanufacturing industries use large amounts of zinc, mainly as coatings on steel beams, sheet steel and vehicle panels in the automotive industry.

The widespread occurrence, relatively simple extraction, and combination of desirable properties have made lead useful to humans since at least 5000 BC. In deposits mined today, lead (in the form of galena) is usually associated with zinc, silver and sometimes copper, and is extracted as a co-product of these metals. More than half of the lead used comes from recycling, rather than mining. The largest use is in batteries for vehicles and communications.

The relative scarcity, attractive appearance and malleability of silver has made it suitable for use in jewellery, ornaments and silverware since before Roman times. Its extensive use in coins throughout history has declined over the past 40 years. Silver is mined and produced mainly as a co-product of copper, lead, zinc, and to a lesser extent, gold. Today, photographic paper and film, followed by the electronics and jewellery/tableware industries are the most important users of silver.

Australian EDR of zinc is 35 Mt, with Queensland holding 54%. The Northern Territory, New South Wales and Western Australia also have zinc EDR.

Australia’s EDR of 19 Mt of lead is about 34% of total identified resources. Queensland has 53% of total EDR, mainly at Cannington and Mt Isa. Other holdings are in Northern Territory, New South Wales, Western Australia and Tasmania.

EDR for silver is 43,000 tonnes, with Queensland having the largest share at 73%, mainly in the Mt Isa, Cannington, Century and Hilton deposits. Other holdings occur in the Northern Territory, South Australia, New South Wales and Western Australia.

Australia has the world’s largest EDR of zinc (17% of the world), lead (25%) and silver (14%).

Mine production of zinc, lead and silver in 2003 was 1.48 Mt, 700,000 tonnes and 1,870 tonnes respectively. These are a slight increase for zinc (up 10,000 tonnes), no change for lead and a slight decrease for silver (down 2,300 tonnes) compared with 2002. In production, Australia ranks first for lead, second for zinc after China and fourth for silver after Mexico, Peru and China. Cannington is the world's largest and lowest cost silver and lead producer and produced almost 233,000 tonnes of lead and 35.5 million ounces of silver in 2003. Century had the largest zinc output at 503,000 tonnes.

Oil and gas

Map 16.29shows significant locations of oil and gas production and includes oil and gas production locations, oil and gas pipelines and oil refineries.

16.29 LOCATIONS OF OIL AND GAS PRODUCTION AND PIPELINES - 2003

Source: Geoscience Australia.

Crude oil and condensate

In 2002-03 production of total crude oil and condensate from the North West Shelf and the Gippsland Basin accounted for 42% and 22% respectively of total Australian crude oil and condensate production. The North West Shelf was the major producer of condensate during 2002-03 with 76% of total Australian production sourced from that region.

Liquefied natural gas (LNG)

All LNG production comes from the North West Shelf Venture and all is exported. LNG production in 2002-03 was 7.8 Mt. Export earnings from LNG in 2002-03 were $2.6b, the same as in 2001-02.

Liquefied petroleum gas (LPG)

LPG is a valuable co-product of oil and gas production and petroleum refining. The major constituents of LPG are propane and iso- and normal-butane, which are gaseous at normal temperatures and pressures, and are easily liquefied at moderate pressures or reduced temperatures. Operations involving LPG are expensive in relation to other liquid fuels because LPG has to be refrigerated or pressurised when transported and stored. LPG is an alternative transport fuel for high mileage vehicles in urban areas, as well as a petrochemical feedstock and domestic fuel.

In 2002-03 the major producers were the Gippsland Basin and the North West Shelf accounting for 42% and 41% of total production respectively.